CAPITALISM VS. SOCIALISM

Capitalism vs. Socialism

Capitalism vs. Socialism

Introduction

Capitalism and communism are two opposing schools of thought in economics and sociology. Communism is an extreme form of socialism. Both capitalism and socialism have been studied extensively, and different philosophies have a stronghold in different parts of the world. For example, America is a capitalist democracy while large parts of Scandinavia and Western Europe are socialist democracies (Schneider & Rayna, 2005).

Under Capitalism, individualism is emphasized to the point that all individuals are, in theory, sovereign beings with certain unalienable rights, endowed by either nature, divine providence or some other objective source. These rights cannot be superseded by anything or anyone, at any time, for any reason. Capitalism postulates that, given all humans are sovereign, the most natural state of humans is that of the Free Market, the unrestricted exchange of goods and services whereby one sovereign person to another. This assumes that all forms of society and civilization roughly boil down to relationships between producers and consumers: at any given moment, every person is either a buyer or a seller of a certain commodity (Soskice, 2001).

Socialism emphasizes the collective state of human beings as members of a larger interdependent society. In Socialist theory, all people are granted certain unalienable rights, defined by consensus within a society, and applicable only insofar as those rights protect the broader needs of society. Since these rights are defined by consensus, they can be abrogated the same way, when society decides that a certain person should have his or her rights taken away from him for whatever reason. Socialism postulates that, given all humans are part of a society, then all humans have certain responsibilities to the group in which they find themselves a part. This assumes that all forms of society and civilization are different collective arrangements where groups of people are obliged to share available resources to increase the likelihood of their survival.

Capitalism

Capitalism is a phenomenon difficult to place historically, politically and socially due to the lack of a universally accepted definition, and that leaves no room for ambiguous interpretations. Some scholars believe, therefore, incorrect to say that capitalism is merely the most natural method of allocating resources within an economic community (for reasons that will be shown later) and is therefore always existed in various forms, from communities from prehistoric to the present day. Those who disagree with this view argue that capitalism is not that the most common way to distribute resources as possible, but is only one option: the debate focuses mainly on the existence or absence of other methods for the distribution of resources (such as the communism or socialism) and that these are applicable in the present economic reality or the past (Hahn, 2004).

Capitalism is a political, social and economic environment in which corporations and wealthy few control the property, including capital assets (land, factories, money, stocks and bonds, bonds). Capitalism differs from previous economic system, the feudalism, for the purchase of labor for wages, and not ...